Registrations of commercial vehicles in EU down 11.8% in March, 9.6% in 1st quarter

27 April 2012

In March, new commercial vehicle registrations dropped by 11.8%, totaling 184,235 units in the EU, according to the European Automobile Manufacturers’ Association (ACEA). With the exception of Germany (+0.3%), all other significant markets shrank, from -7.0% in the UK to -11.2% in France, -22.1% in Spain and -45.4% in Italy.

Over the first quarter of 2012, demand was down 9.6%, compared to the same quarter a year earlier. Downturn prevailed across countries as new registrations fell by 1.0% in Germany, 5.8% in France, 8.9% in the UK, 22.6% in Spain and 36.1% in Italy. In total, the EU recorded 451,244 new commercial vehicles.

New Light Commercial Vehicles up to 3.5t. In March, with 151,007 new vans registered, the segment of vans faced the sharpest drop since October 2009 (-13.8%). The German market slightly contracted (-1.0%), while all other major markets experienced double-digit downturns, which ranged from -11.1% in the UK to -12.0% in France, -20.0% in Spain and -47.7% in Italy. From January to March, results were diverse across markets as demand in Germany was stable (+0.1%), whereas France saw its market down by 6.6%, the UK by 14.7%, Spain by 21.7% and Italy by 37.7%. A total of 368,763 new vans were registered, or 11.2% less than in the same period in 2011.

New Heavy Commercial Vehicles over 16t (excluding Buses & Coaches).
In March, the EU counted 21,913 new heavy trucks, which is 4.1% less than in March last year. The UK (+3.0%) and Germany (+6.3%) posted growth, unlike France (-2.4%), Italy (-14.7%) and Spain (-34.5%). Three months into the year, the EU truck market contracted by 3.1% with 56,135 new vehicles registered. The German market remained the largest although down 2.9%, followed by the French which was stable at +0.5%. The UK ranked third in absolute figures but was the only major market to grow substantially (+15.8%). Italy
(-18.0%) and Spain (-21.7%) saw their markets considerably shrink.

New Commercial Vehicles over 3.5t (excluding Buses & Coaches). March results were also negative for truck registrations which were down 3.4% and totaled 29,856 units. Germany and the UK grew by 2.1% and 20.1% respectively, while France (-3.4%), Italy (-25.0%) and Spain
(-35.2%) all contracted. In the first quarter, the 74,702 new trucks recorded in the EU represented a 2.4% decrease compared to the first three months of 2011. Despite the expansion of the second and third largest markets, France (+2.1%) and the UK (+28.7%), the downturn affecting Germany (-4.4%), Italy (-22.7%) and Spain (-23.6%) led to an overall decrease of new registrations in the region.

New Buses & Coaches over 3.5t. In March, buses and coaches were the only segment to post growth (+17.9%), sustained by the strong demand in the UK (+86.7%) and Germany (+22.6%). From January to March, the UK (+70.1%) and Germany (+18.8%) remained the largest markets, followed by France (-11.5%). In total, 7,779 new vehicles were registered in the EU, or 6.2% more than in the same period last year.

ECB is doing massive quantitative easing and rate cuts like the US central bank system has done each year since 2008. The interest rates cannot be cut any more. There is no doubt that Europe as a hole is in a double dip recession. Now we just need to see the GDP growth for Q1, 2012 to have it officially confirmed. The recession is very unevenly distributed with Eastern Europe having small positive growth, Germany and Scandinavia having zero growth, UK dropping slightly and the rest of EU now being in a severe recession. There is no easy cure this time as the Governments of the countries that are in severe recession cannot borrow any more money in order to rise public spending. In order to avoid further downgrades of their bonds they need to cut public expenses and not raise them. There are a few things that can be done that will generate growth in the current situation. One is reforms of labor market policies that will make it easy and costless for corporations to hire and fire people. Another is to cut wages for everyone so that the export industries gains competitiveness. None of these policies are popular. Europe is now paying the price for decades of growth stimulated with borrowed money. This time it will take several years to get back to normal growth as we cannot borrow any more. It will be very painful in particular for those countries that will be slow to reform their labor markets and hold back wage increases.

Leaving the Euro is only relevant for those countries that breaks down politically and are unable to reform and therefore are cut from euro credits altogether. I can only see Greece in that situation and it will be more painful for them than doing the reforms and stay within the Euro.